Constant opportunity cost refers to the concept that as more units of a particular good are produced, the opportunity cost remains constant. This means that resources are equally suited for producing both goods.
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Law of Diminishing Returns: This law states that as additional units of a variable input are added while other inputs remain fixed, eventually there will be a decrease in marginal output.
Trade-off: A trade-off occurs when choosing one option over another involves sacrificing some benefits or advantages.
Comparative Advantage: Comparative advantage refers to the ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than others.